IRFA: 100% reallocation of massive SREs must move quickly to prevent erosion of historic 2026-’27 RFS volumes

U.S. EPA granted 29 small-refinery exemptions (SREs) Aug. 31 to the Renewable Fuel Standard blending levels for the 2025 compliance year.

The total number of RFS compliance credits, known as renewable identification number (RIN) credits, swelled to 1.76 billion, compared to an earlier projection of 990 million.

EPA further stated that by the end of October, the agency will propose to reallocate 100 percent of the difference between projected and actual exempted volumes for 2025 SREs into the 2026 and 2027 RFS blending requirements.

“Every day that passes while these new refinery exemptions are final but the reallocation is hypothetical leaves renewable fuels producers and farmers in the lurch,” said Monte Shaw, executive director of the Iowa Renewable Fuels Association. “The EPA must act expeditiously to propose and finalize a rule that reallocates 100 percent of the new refinery exemptions. Nearly a billion gallons of renewable fuels demand hangs in the balance.”



President Donald Trump garnered much praise from the agriculture community in March by finalizing the most robust RFS blending levels in history for 2026 and 2027, called the Set 2 rule.

“Since President Trump put the RFS back on track in March, it has been doing exactly what it was supposed to—driving demand for biofuels,” Shaw said. “In Iowa, we had biodiesel plants that were shuttered or running at very reduced rates. Today they are producing at full capacity, buying soybean oil from our farmers and hiring back workers that had been let go. It is almost unimaginable to pull the rug out from under this success story by granting what we believe are unjustifiable refinery exemptions. Exemptions should be extremely rare and only granted when a refiner experiences economic hardship due to the RFS. That’s just not happening. While we are disappointed by the exemptions, a swift and full reallocation can preserve every gallon of renewable fuels demand under the RFS.”

The March RFS rule also prospectively reallocated projected refinery exemptions for 2026-’27, similar to the 2025 projections.

While EPA has not announced its intentions, if the agency granted similar refinery exemptions in 2026 and 2027 as it did in 2025, an additional 1.6 billion gallons of renewable fuels demand would be in jeopardy.

“The EPA should also make clear the agency will take steps to protect the historic RFS blending levels finalized in March,” Shaw said. “Reallocating the new 2025 exemptions is important, but so is preventing any backsliding on 2026-’27 blending levels. The market needs certainty. The record-breaking RFS levels don’t mean a thing if they are undermined through unjustified refinery exemptions. IRFA members urge EPA to commit to full reallocation of any 2026-’27 refinery exemptions in excess of the projections formalized in the Set 2 rule.”

Shaw concluded, saying, “We want to thank the Iowa delegation and all the renewable fuel champions for speaking up loudly when exemption rumors first surfaced. While we may disagree with the exemptions, our united voices ensured that 100 percent reallocation was part of the decision. Now we’ll stand united to ensure 100 percent reallocation is expeditiously implemented.”